VPN - Premier endorses Federal tax plan

Premier endorses Federal tax plan

The Premier, Mr Kennett had declared the Howard Government’s proposals for tax reform ‘unequivocally good for Australia’, while making a number of comments on the proposals.

Last year, Mr Kennett outlined the ‘four pillars’ against which tax reform should be assessed:

Incentives to work and save

Indirect tax reform to reduce business costs and increase exports

Commonwealth-State relations

Incentives for specific investments

The first three criteria have been met, whilst in relation to the fourth, the Commonwealth is considering business taxation separately.

Mr Kennett welcomed the proposal to direct all consumption tax revenue to the states as providing ‘a much stronger revenue base over the longer term’ and as an opportunity to abolish a number of ‘dysfunctional’ state taxes on businesses and consumers, while pointing out that it increased States' financial dependence on the Commonwealth and that there are many transitional issues to be discussed.

Mr Kennett said that the Commonwealth should have considered a further penalty for high income earners who do not take out private health insurance, and that it was important to lower the rate of Capital Gains Tax to overseas levels (20% in the USA), with the possibility of differential rates for venture capital and property.

(News Release, Office of the Premier, August 14, 1998)